Blockchain technology has emerged as a transformative force, with its decentralized and secure ledger system revolutionizing industries far and wide. As blockchain networks become increasingly sophisticated and interconnected, questions surrounding the ownership of intellectual property (IP) within this ecosystem have arisen. One of the key areas of contention in the blockchain world revolves around the ownership of the IP in the user-facing application, a critical component that facilitates interactions with blockchain networks.
At its core, a blockchain network comprises two essential components: the back-end blockchain software and the user-facing app. The blockchain software dictates how data is recorded on the distributed ledger, while the user-facing app acts as the gateway for participants to send and receive transactions, interacting with the blockchain software through application programming interfaces (APIs).
In most cases, the blockchain software is pre-existing software used by the blockchain developer to serve multiple clients. On the other hand, the user-facing app is often customized software created by the blockchain developer to address the unique needs of the trusted intermediary, which could be an organization or entity seeking to leverage blockchain technology for its specific use case.
A central IP battleground within the blockchain landscape revolves around determining the rightful owner of the IP associated with the user-facing app. Similar to conventional software development agreements, this issue carries significant commercial implications for the parties involved, encompassing various aspects of IP within both the blockchain software and the user-facing app.
Establishing ownership and licensing limitations for both pre-existing IP and IP generated during the development of the blockchain network is paramount. The outcome is influenced by factors such as the level of customization and bespoke design required for the app’s creation, as well as considerations regarding “white-labeling” the app. Moreover, addressing the use of third-party and open-source software within the app’s development, as well as assessing liability for such incorporation, should be early priorities in the development process.
A potential compromise in the IP ownership dispute is for the IP in the user-facing app to vest with the blockchain developer. However, the trusted intermediary could be granted a broad license, which may even be exclusive for a defined period, to utilize the IP in the app. This arrangement allows the trusted intermediary to use the blockchain network effectively and adapt the app for use with other blockchain networks, which may employ different blockchain developers’ software.
To make this model work, it is essential that the user-facing app is designed in a manner that prevents “lock-in” with a specific blockchain developer’s solution. This ensures flexibility and interoperability, which are crucial as blockchain networks continue to evolve and diversify.
In the ever-evolving world of blockchain technology, the question of IP ownership is just one of many legal and commercial considerations that must be navigated. As the blockchain ecosystem matures, clear agreements and robust governance structures will be essential to protect the interests of all stakeholders and foster innovation within this groundbreaking technology. The determination of IP ownership within the blockchain landscape will undoubtedly play a significant role in shaping the future of this transformative technology.
